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Ober | Kaler www.ober.com 7 Who are the entities involved in the dispute and named in the suit? Plaintiffs: –Antitrust standing: »Plaintiffs must show antitrust injury – their injury flows from injury to competition »In exclusionary conduct cases, foreclosed hospital competitor may be more efficient enforcer of antitrust laws than insurers or consumer/patients. Palmyra v. Phoebe Putney »Plaintiff must participate in alleged relevant market –Who the excluded party is can impact market definition

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Ober | Kaler www.ober.com 8 Who are the entities involved in the dispute and named in the suit? Defendant or defendants: determines type of legal claim –If only single entity involved in the exclusionary conduct, claims limited to Section 2 unilateral conduct –If multiple entities involved, plaintiffs may allege Section 1 concerted action claims »But still may name only single defendant without including other conspirators as parties. Tactical reasons? Franco v. Memorial Hermann; LRCC v. Baptist Health »Concerted action may be vertical (e.g., hospital-health plan contracting) or horizontal conspiracy

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Ober | Kaler www.ober.com 9 Who are the entities involved in the dispute and named in the suit? –Certain horizontal conspiracies can be per se violations: »Where multiple hospitals or health plans involved, plaintiffs can alleged horizontal conspiracies, including group boycotts that are per se violations. Heartland v. Midwest Division »Horizontal agreements between competitor physicians (e.g., by medical staff to boycott a SSH) also may support per se claims

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Ober | Kaler www.ober.com 10 What is the proper relevant market? A party cannot monopolize a market in which it does not compete –Thus physicians cannot maintain a Section 2 claim vs. hospital based on exclusionary conduct in the physician services market (unless hospital also employs physicians) Cluster market of all hospital inpatient acute care services vs. only those specialty services implicated by the exclusionary conduct? Commercially-insured patients only vs. all available patients (including Medicare, Medicaid, and self pay). LRCC, Rome

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Ober | Kaler www.ober.com 11 Is The Exclusionary Practice Unilateral or Joint Conduct? Joint conduct viewed more strictly than unilateral, requires less market power, and may be per se violation For unilateral conduct, under Section 2 plaintiff must prove significant market power (monopoly power) = market share > 65% For joint conduct (and conspiracy to monopolize), plaintiff must show an agreement or conspiracy

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Ober | Kaler www.ober.com 12 Is The Exclusionary Practice Unilateral or Joint Conduct? Proving an unlawful agreement –Hospital or hospital system, its board of directors, officers, employees; or health plan subsidiaries; or integrated JVs are usually incapable of conspiring as a matter of law because parts of same single entity –Circuits are split on whether a hospital and its medical staff (or the medical staff board, committees, or other entities) are capable of conspiring in the context of peer review credentialing »But apply outside of peer review? »Exception - one or more physicians has an independent personal stake

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Ober | Kaler www.ober.com 13 Proving an unlawful agreement Even where legally possible, plaintiff must still show conspiracy by direct or circumstantial evidence –Often an express contract (e.g., exclusive) –If not, can be difficult to prove. Memorial Hermann; but see Heartland

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Ober | Kaler www.ober.com 15 Factors to distinguish anticompetitive conduct from legitimate competition Are plaintiffs foreclosed from the market? –Primary focus of the antitrust analysis of exclusionary conduct: access to patients »Must consider all types of patients –Plaintiffs must show foreclosure will prevent them from being viable competitor »Difficult where plaintiff remains financially successful, easier when forced out of business. Rome, but see Memorial Hermann –And must show competition/other competitors foreclosed, not merely plaintiff

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Ober | Kaler www.ober.com 16 Factors to distinguish anticompetitive conduct from legitimate competition Are there any effects on competition? –If no significant foreclosure, highly unlikely that a plaintiff will be able to demonstrate anticompetitive effects. »Even if plaintiff is foreclosed and injured, often there is no apparent effect on competition. »Anticompetitive effects less likely where there are other competitors in addition to plaintiff –In healthcare context, plaintiffs often allege direct anticompetitive effects (e.g., higher prices, lower quality and reduced choice) »Difficult to prove; must present evidence harm actually occurred in the market. LRCC